Bitcoin breaks $70,000 for the first time since May as macro tailwinds build
Bitcoin charged past $70,000 on Aug. 20, touching roughly $71,900 at its peak, its highest level since May 31. The move capped a dramatic 48 hours for the largest cryptocurrency, driven by a potent combination of falling U.S. Treasury yields, a weakening dollar, and renewed political enthusiasm for the digital asset industry from President Donald Trump.
The breakout was not a slow grind. It was an extension of a violent squeeze that began on Wednesday, when Bitcoin surged 7 per cent and triggered heavy short covering across derivatives markets. More than $1 billion in Bitcoin short positions were wiped out in roughly an hour, according to Bloomberg’s earlier reporting, one of the sharpest liquidation events in recent months.
Thursday’s rally extended that squeeze and drew fresh capital into the options market. Deribit data showed about $1.5 billion in Bitcoin calls positioned at the $70,000 strike, a signal that traders had been positioning for, or betting on, precisely the level Bitcoin has now reclaimed.
For more on the asset at the centre of the move, see our Bitcoin coverage.
Two catalysts behind the surge: Bessent’s yield push and Trump’s crypto summit
Bloomberg identified two main drivers behind the rally, and both came from Washington.
The first was macroeconomic. Treasury Secretary Scott Bessent moved to push bond yields lower, and the market also reacted to U.S. plans to buy back longer-dated Treasuries. The effect was immediate: yields tumbled and the dollar slid to a three-month low. That combination is catnip for risk assets, and Bitcoin, which has increasingly traded like a high-beta proxy for liquidity conditions, responded in kind.
The second catalyst was political. Trump held a high-profile meeting with crypto industry leaders, including executives from Coinbase, Payward/Kraken, and Blockchain.com. The sit-down signalled a notably friendlier posture toward the industry from the White House at a moment when the sector has been lobbying hard for regulatory clarity in the United States.
Trump added further fuel by indicating that the U.S. is considering options to allow the Hyperliquid derivatives platform to operate in the country. Hyperliquid is an offshore exchange, and the suggestion that it might gain a pathway into the U.S. market was read as another sign of a softening stance. The token tied to the platform jumped 23 per cent in 24 hours, according to CoinGecko data, making it one of the standout performers of the session.
Other crypto assets rose alongside Bitcoin, and the broader market moved higher in step with risk assets more generally. The correlation was the story: when yields fall and Washington signals warmth toward crypto, capital flows back in quickly.
Why short covering turned a rally into a stampede
The mechanics of the past week matter for understanding what comes next. Bitcoin’s move above $70,000 was not purely a reflection of fresh buying. A substantial portion of it was forced.
When Bitcoin began rising on Wednesday, traders who had sold the asset short were forced to buy it back to close their positions, pushing the price higher still. That cascade liquidated more than $1 billion in shorts within about an hour. Thursday’s continuation extended the squeeze, and the derivatives positioning that had built up during Bitcoin’s summer range effectively unwound in a matter of days.
This is a familiar pattern in crypto markets, where leverage runs deeper than in traditional equities and liquidation cascades can amplify moves in both directions. The $1.5 billion in calls sitting at the $70,000 strike on Deribit adds another wrinkle: as the price crossed that level, dealers hedging those options may have needed to buy spot Bitcoin, adding further upward pressure.
The risk, as ever with squeeze-driven rallies, is that once the forced buying exhausts itself, the market needs genuine demand to hold its gains. The good news for bulls is that this rally had real macro support behind it, not just positioning noise.
Macro and regulation: the two levers that still move Bitcoin
The deeper lesson from Aug. 20 is how tightly Bitcoin remains tethered to two forces: U.S. macroeconomic conditions and American policy signals on regulation.
On the macro side, the relationship could hardly have been clearer. Bessent’s push to bring yields lower, combined with plans to buy back longer-dated Treasuries, sent yields tumbling and the dollar to a three-month low. Bitcoin, which spent much of 2024 and 2025 trading as a liquidity-sensitive risk asset, rallied hard. Falling yields reduce the opportunity cost of holding non-yielding assets, and a weaker dollar tends to support all manner of alternative stores of value. The rally in crypto ran alongside strength in broader risk assets, confirming that this was a macro trade expressed through Bitcoin rather than an idiosyncratic crypto story.
On the regulatory side, the picture is shifting just as quickly. A meeting between a sitting president and executives from Coinbase, Kraken’s parent Payward, and Blockchain.com would have been unthinkable during the enforcement-heavy years. The discussion around letting Hyperliquid operate in U.S. jurisdiction points in the same direction. For an industry that has spent years complaining about regulatory uncertainty, the headlines of the past week suggest the wind has changed.
The two levers are linked. A friendlier regulatory environment expands the addressable market for crypto businesses and makes institutional allocation easier to justify. Easier macro conditions provide the liquidity that funds those allocations. When both levers move in the same direction at once, as they did on Aug. 20, the result is a move like this one.
What it means from here
Bitcoin’s reclaim of $70,000 is significant on several levels. Technically, it puts the asset back at levels last seen at the end of May and breaks the summer’s trading range to the upside. Positioning-wise, the wipeout of more than $1 billion in shorts removes a chunk of the bearish overhang, though it also means some of the fuel for further squeezes has been spent.
The $1.5 billion in $70,000-strike calls on Deribit now sits at or near the money. How those positions behave as expiry approaches will shape short-term price action, and options flows are likely to remain a key tell for traders.
The bigger question is durability. Squeeze-driven rallies can fade once forced buying ends, but this one was underpinned by genuine macro developments: lower yields, a three-month dollar low, and Treasury buyback plans. Add a White House that is actively courting crypto executives and floating pathways for offshore platforms like Hyperliquid to enter the U.S. market, and the sentiment shift looks more structural than tactical.
Sentiment in crypto can flip quickly, and both directions of that knife were on display this week. Bears who loaded up on shorts were liquidated in an hour; bulls who had been waiting for a macro catalyst got two of them at once. For now, the market has voted, and Bitcoin is back above $70,000 with the wind of Washington and the bond market at its back.
